Core inflation

The Consumer Price Index (CPI) calculated and published by INSTAT enables the measurement of total inflation rate. Inflation can also reflect temporary effects or one-time shocks which eventually dissipate. Core inflation is defined as an inflation estimate which omits these short-term and one-time supply-side shocks. It represents the most stable inflation component which is affected by demand-pulling factors and consequently by monetary policy.

Bank of Albania generates different estimations for core inflation which are applied in analysis and decision-making processes. The main estimate which is also referred to in Monetary Policy Report is defined as “permanent exclusion” approach. These implies the permanent removal of certain basket items which reflect high-short term price volatility and are fairly unaffected by the monetary policy action. Data used in estimating core inflation is based on CPI statistic published by INSTAT.

As a rule, core inflation estimates are updated on the 14th day of each month or the following day should the 14th coincide with a holiday.

Data Series